John McDonnell, the Shadow Chancellor of the Exchequer has said that workers could be £500 a year better off under Labour’s new plans to expand employee ownership of large companies.
The Shadow Chancellor has set out how the Labour Party will make employees part-owners of their company and boost their incomes.
This “Inclusive Ownership Fund” would be compulsory for any company with more than 250 employees.
During his keynote speech at the Labour Party Conference in Liverpool, Mr McDonnell said: “Workers, who create the wealth of a company, should share in its ownership and, yes, in the returns that it makes.
“The evidence shows that employee ownership increases a company’s productivity and encourages long term thinking.
“We will legislate for large companies to transfer shares into an ‘Inclusive Ownership Fund’.
“The shares will be held and managed collectively by the workers.”
'11 million workers each with a greater say'
The Shadow Chancellor added: “The shareholding will give workers the same rights as other shareholders to have a say over the direction of their company.
“And dividend payments will be made directly to the workers from the fund.
“The dividend payments workers will receive will be up to £500 a year.
“That’s 11 million workers each with a greater say, and a greater stake, in the rewards of their labour.”
Mr McDonnell pledged that dividend payments from the scheme will be worth up to £500 a year for workers by the end of Labour’s first term in government.
‘Long term future prosperity’
Mr McDonnell also proposed the capping of individuals’ dividend payments at £500 and putting the rest into a social dividend.
This capping of individuals’ dividend would make over £2bn available for public services and social security.
Mr McDonnell said: “We all know it’s not just the workers of a company that create the profits it generates.
“It’s the collective investment that we as a society make that enables entrepreneurs to build and grow their businesses, maintaining the roads and investing in the infrastructure we rely upon, educating the workforce, caring for them when they’re sick and investing in the research and development that enables technological innovation.
“So we believe it’s right that we all share in the benefits that investment produces.
“That’s why a proportion of revenues generated by the ‘inclusive ownership funds’ will be transferred back to our public services as a social dividend.
“Mobilising billions that could be spent directly on the social security system which supports those who have retired, are unable to work, or need society’s support in other ways.
“We will be a Labour government committed not just to meet the challenges facing today’s generation but to secure the long term future prosperity of the next.”
Labour leader Jeremy Corbyn and Shadow Chancellor John McDonnell at the Labour Party Conference in Liverpool
'Water bills have risen 40%'
Mr McDonnell called for water, energy and Royal Mail to be brought back into public ownership, to applause from the Labour Conference hall.
He said: “Since the privatisation of water, water bills have risen 40% in real terms.
“£18 billion has been paid out in dividends.
“Each day enough water to meet the needs of 20 million people is lost due to leakages.
“With figures like that, we can’t afford not to take them back into public ownership.”